Bracing For Clearwire Earnings, Future of near-WiMAX (CLWR, S, INTC, CMCSA)

Clearwire Corporation (NASDAQ: CLWR) is set to report earnings after the close of trading today.  While the actual earnings number is probably irrelevant, that is not true for the revenue. This report may actually have a spillover impact on other larger companies such as partner Sprint Nextel Corp. (NYSE: S).

The consensus from First Call on Clearwire for Q4-2008 is -$0.71 EPS on $60.01 million in revenue, and the estimate for the current quarter which is Q1-2009 is -$0.49 EPS and $66.56 million in revenues.

Analysts are looking for the 2009 losses to be cut in half and for revenues to grow well above more than 50% to an implied level of -$1.97 EPS and about $370.7 million in revenue.

What we will be most interested in is how fast that Clearwire will enter more major markets.  That has been slower than some would have hoped for, but that also may save on cap-ex.  This earnings report may also give us the first solid look at the balance sheet following the completion of the deal with Sprint.  But that may be another quarter before we can truly pick that apart.

While Intel Corp. (NASDAQ: INTC) and Comcast (NASDAQ: CMCSA) have been hit in the past, we do not expect a huge impact from the writedowns.  Intel wrote off $950 million and Comcast recently said that earnings were hurt by $600 million over Clearwire writedowns.  It is unlikely that there will be similar numbers any longer, but traders could use the “where there is smoke, there is fire” analogy in today’s “fire, ready, aim” markets IF, repeat if, there are any problems.

Sprint shares are down by some 7% today while Clearwire is down some 10% at $2.94.

Jon C. Ogg
March 5, 2009